NDSL Fee Increase Decision

September 23, 2018

Following over 30 comment letters objecting to the adoption of proposed fees, and robust public participation by TLOA and lakefront owners, administrative action has been taken by Nevada Division of State Lands (NDSL). On Friday, September 21, 2018, after deliberating for 15 minutes, the NDSL Registrar, Charlie Donohue, adopted the following statewide annual fees for piers and buoys:

While the adopted fees are still too high, it’s the process and the NDSL appraisal that have us most concerned.

The NDSL staff stated that they considered all comments and information collected and/or provided, however, TLOA was struck by the NDSL’s lack of appropriate action on this issue. The TLOA expected a full analysis on various methods that would result in a fair assessment and basis for fees, but that is not what occurred. The NDSL failed to consider substantial documentation provided as a result of TLOA’s work with the California State Lands Commission in 2017-18 on methodology and fairness. In the final response before adopting the fee structure, the NDSL cited a single letter written in opposition to the California effort as its sole basis for ignoring a fair and reasonable approach.

Further, the NDSL failed to appropriately respond to TLOA’s specific comments and accredited review regarding their erroneous approach to methodology and fees based on the NDSL “Market Rent of a Typical Nevada Pier Site and Typical Nevada Buoy Site” appraisal conducted by Johnson/Perkins/Griffin. Review of the NDSL appraisal by TLOA’s forensic appraiser Monte J. Short found glaring errors and violations of professional appraisal standards that concluded the NDSL appraisal should be invalidated. Rather than defend their appraisal, the NDSL staff simply ignored Short’s review and avoided any response in the administrative record.

The core problem is that the NDSL is basing its fees on the value added by the piers to the upland value of your home as if this is the correct methodology – which it is not. The NDSL disregards the portion of your pier on private land between high and low water, and instead claims that portion as value attributable to the State of Nevada. We believe this in no way supports the concept of “fair market value” as envisioned by the Nevada Legislature.

TLOA and others understand an adjustment in current fees may be warranted, but not on the basis presented by the NDSL Registrar. For example, should the NDSL appraisal remain unchallenged as part of the administrative record, annual fees on a pier could theoretically increase over time up to the NDSL appraiser’s recommendation of $12,000/year.

Before the regulations are enacted, the regulatory process requires ratification by the Nevada Legislative Counsel Bureau. Today, it is unclear as to the timing of such a hearing. We will continue to oppose these fees, and once the TLOA confirms the next phase in the process, we will contact you with more information on how you can help with this very important issue.